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Budapest: How to be Silicon Valley?

In his May 2006 essay titled “How to Be Silicon Valley,” Paul Graham – founder of YCombinator – discusses what it would take to reproduce Silicon Valley elsewhere. While the essay may be a little outdated, it is still relevant today.

I was immediately sucked into the essay after reading one of the opening paragraphs where Paul Graham gives a shout out to my home town – Buffalo, New York. He writes, “If you could get the right ten thousand people to move from Silicon Valley to Buffalo, Buffalo would become Silicon Valley.” As a proud former-Buffalonian I laughed-out-loud after reading this but couldn’t deny the accuracy of the statement. Silicon Valley is the way it is because of the people.

On October 23rd, 2011 I said goodbye to my former home in Buffalo and boarded a plane bound for Budapest, Hungary. Perhaps moving to Budapest was my a “hipster rebellion” that came out of my desire to be different in my post-college life. Regardless, what I found there was a bustling, modern city with more to offer than I could have ever imagined. If there is to be a “Silicon Valley” of Europe, Budapest is just the place for it to happen.

In order to reproduce Silicon Valley, you need to reproduce that magical moment when a company is first “conceived.” You’ve got to reproduce that romantic situation when cofounders come together to create their baby… I mean startup. This romantic situation takes place at the kitchen table, its scribbled on napkins at bars, in garages or during all night hack sessions when the first prototype is created. To reproduce these situations you need people and according to Paul Graham you need two specific types of people… rich people and nerds. Nerds are needed to found the startups and rich people are needed to invest in them.

So the question is – how do you attract nerds and rich people? Graham writes that nerds like is other nerds. He says, “smart people will go wherever other smart people are. And in particular, to great universities.”

Budapest is home to a plethora of great universities. Central European University (CEU) is ranked 24th globally in the Financial Times EMBA Ranking 2009. Corvinus University of Budapest is placed 65th in the FT Ranking of Top 65 European MBA programs 2008. Budapest University of Technology and Economics is rated 235th in the world according to the Webometrics Ranking of World Universities (July 2009). The list goes on.

According to Graham, “creating a new university would not be enough to start a Silicon Valley.” As Graham describes it, the university is just the “seed” that has to be planted in the right “soil.” Age old history, beautiful architecture, a temperate climate, and stunning views along the banks of the danube help make Budapest a fertile planting ground for new startups.

About The Author

Jordan Fried – Jordan is Business Development Manager at He blogs about business development and inbound marketing, among other things, at This article originally appeared in HigherClick's blog.